It’s not often that a Pulitzer Prize-winning playwright gives a keynote speech at a competition policy conference. But last week in Washington, I introduced PEN America president Ayad Akhtar before he gave a luncheon speech at a conference on monopoly policy sponsored by the Open Markets Institute.
The pairing is not as random as it seems. Narrator of Akhtar’s latest book, Elegy of the Fatherland, is a Pakistani immigrant whose family came to what they believed to be a land of opportunity, only to realize that America has turned, over time, into a country where hyper-individualism has collided with the culture of money. The result? A society that more easily protects shareholder rights than civil rights.
The novel, read at book clubs across America, contains not only a lengthy visit to antitrust jurisprudence, but also a critique of for-profit financialization and health care. It also examines all the ways “protecting the consumer’s right to the ‘lowest price’ as the first principle has been operated as at legitimizing the discourse of the takeover of the political process by big (and bigger) business, as Akhtar puts it. “In other words, our political order – by which I do not mean only the legislature – is increasingly defined by the thinking and interests of companies.”
When monopoly power becomes a topic at America’s kitchen table, something embedded in popular fiction, business leaders should listen carefully. The popularization of antitrust is part of a larger shift in which economic policy discussions are increasingly involving not only economists, but also lawyers, activists and ordinary people. This group is less interested in technocratic debates about market mechanisms than in grassroots discussions about how corporate power has distorted the market in unhelpful ways.
Consider a sales contract that prevents farmers from repairing their own equipment instead of paying for expensive service from the manufacturer. Or minimum wage cleaning staff are stuck with non-compete clauses that prevent them from doing cleaning work for companies that can pay them an extra dollar or two an hour. Or the fact that, until now, easy over-the-counter hearing aids are not available because device manufacturers cannot buy them without an expensive prescription (the bill Senator Elizabeth Warren repealed in 2017 is one of the few things she and Donald Trump agree on) .
Part of this shift towards a kitchen table sensibility in competition policy is down to a growing public sense that the economics profession itself has been captured by corporate interests. As Cristina Caffarra, an economist and consultant on hundreds of corporate mergers, put it on the show, “economists create useful narratives and sell them to lawyers”. He then used this seemingly scientific testimony to argue his case.
But the current crop of regulators in Washington is less interested in economic assumptions about how the market, which many are questioning, especially in the digital space, must work Instead, he prefers a more inductive approach to truth, where facts are laid out in an informed manner and judged on their own merits.
This approach is what brought Federal Trade Commission chairwoman Lina Khan and Justice Department antitrust chair Jonathan Kanter to their positions. The starting point is that the economy is structured by politics, and politics tends to be structured by the people with the most money. Thus, the traditional economic theory of markets is no more, or less, useful than a collection of real-world facts that either party can bring to a case.
As Kanter, who sat on one of the panels, said, “discussion [about corporate power] now about real people, and that is very different from the technocratic conversation we had when I came to the field. And I think it’s really important to have an honest conversation. For him, thinking about antitrust policy should include anything that prevents individuals from being fully determined, in the sense that they can make choices that give them a better life. It is an antitrust philosophy that is more in line with the idea of ​​constitutional democracy than with the Chicago school.
This is also a broad definition, and one that has yet to be proven in court. Despite more federal resources, more state antitrust cases and an explicit 2021 White House executive order with 72 different initiatives from federal agencies designed to address competition issues, the global merger and acquisition market is the highest in 2021 (the 2022 number is lower but lower. still healthy compared to pre-pandemic levels).
Perhaps Warren, who also attended the conference, called for a broader competition agenda, going beyond arguments about dismantling Big Tech. Among other things, he urged policymakers to fight more questionable mergers instead of using “remedies” (which are expensive to implement and easy to play), to make executives personally liable in criminal cases if their companies violate antitrust laws and to prevent private ones. equity roll-up strategy. Warren has a record of setting the policy agenda in antitrust. CEOs should watch this space carefully.
rana.foroohar@ft.com